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Payment Terms
Cash on Delivery (COD)
Definition
Payment collected at the time of delivery rather than in advance or on credit.
Overview
COD reduces risk of non-payment by collecting payment when goods are delivered. It's common in e-commerce and for new customer relationships.
Example
A furniture delivery company collects $2,000 cash or card payment when delivering a sofa.
Best Practices
Use for new customers or high-risk situations. Ensure delivery personnel can process payments.
Common Mistakes to Avoid
Not accepting multiple payment methods
Poor tracking of COD payments
Delivery without payment
Frequently Asked Questions
What if the customer can't pay on delivery?
Have a clear policy—return goods or reschedule with prepayment.